On April 30th, the Federal Reserve issued revised guidance and terms for the Main Street Lending Program, which includes the previously announced Main Street New Loan Facility (“New Loan Program”) and the Main Street Expanded Loan Facility (“Expanded Loan Program”). In total, the Main Street Lending Program is anticipated to make approximately $600 billion in loans to eligible businesses. The revised guidance expands both the New and Expanded Loan Programs to include companies with up to 15,000 employees or up to $5 billion in 2019 annual revenues. Previously, the program was limited to companies with up to 10,000 employees or $2.5 billion in 2019 annual revenues. The revised guidance also lowers the minimum loan amount for the New Loan Program to $500,000 from $1,000,000, welcoming smaller companies to seek the loan. Eligible New Loan Program borrowers can still receive loans of up to $25 million, or an amount that, when added to the eligible borrower’s existing outstanding and undrawn available debt, does not exceed four times the eligible Borrower’s adjusted 2019 EBITDA.
In addition to these revisions, the Federal Reserve introduced a new facility, the Main Street Priority Loan Facility (“Priority Loan Program”). The Priority Loan Program allows eligible borrowers a maximum loan size that is the lesser of $25 million or an amount that, when added to the eligible borrower’s existing outstanding and undrawn available debt, does not exceed six times 2019 EBITDA. The Priority Loan Program also has a minimum loan size of $500,000.
Please note that the Federal Reserve has yet to announce a launch date for the Main Street Loan Program, although this is anticipated to occur in the near future.
Please visit ML&R’s dedicated COVID –19 page for further information regarding the Main Street Loan Program, including term sheets for each facility and FAQs.